Walk of Shame: The Kardashian Kard

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This Motley Fool series examines things that just aren't right in the world of finance and investing. Here's what's got us riled up this week. If something's bugging you, too -- and we suspect it is -- go ahead and unload in the comments section below.

Today's subject: Kardashian sisters Kim, Kourtney, and Khloe -- already flush from a retail empire that includes clothes, fragrances, shoes, and fitness products -- now want a cut of the money teen girls are spending on their gear.

On Nov. 9, the sisters introduced a new prepaid debit card offered through Mobile Resource Card and MasterCard (NYSE: MA  ) . "Take us with you everywhere," the sisters proclaim at the glam website marketing the card.

Here's hoping young girls ignore their plea. Austerity isn't exactly what we're known for here in the U.S., and American teens reflect our spendthrift ways. A 2004 study by Nellie Mae found that the average college freshman carries a balance of $1,585 on credit cards.

If that number has gone down at all, it's probably not by much. Federal Reserve statistics show that Americans kept $826.9 billion on credit cards in 2005, versus $813.9 billion in September. Five years of belt-tightening has cut our national tab by a measly 1.6%.

Why you should be indignant: Prepaid debit cards are supposed to help control spending, not promote it. But don't tell the Kardashians that. The press release announcing their "Kard" is just another attempt at tapping into the consumerism zeitgeist. "Shopping just got a lot more fun!" reads the excited pitch in the press release.

Yeah, and a lot more expensive. The Kardashian Kard comes with an initial membership fee of $99.95 for one year, or $59.95 for six months. A $7.95-per-month fee applies after the purchase period.

And there are other fees. Want to withdraw money from an ATM? That'll be $1.50, plus the bank's ATM fee. Want to use the card's billpay service? That'll be $2. Want to transfer money from another debit card? That'll be 2.5% of the transfer amount, please.

Surprised? Don't be. The Kardashians need money to keep up their lifestyle, and they wouldn't put their image on anything that didn't help pay their exorbitant bills.

Remember, too, that prepaid debit cards resemble credit cards in another important way: Both make money for banks. That's why JPMorgan Chase (NYSE: JPM  ) , Visa (NYSE: V  ) , Bank of America (NYSE: BAC  ) , Citigroup (NYSE: C  ) and so many others offer them.

What now? Mobile Resources Card says applicants have to be 18 to qualify for the Kardashian Kard. If only that meant something. After all, this same company actively touts prepaid cards for teens at its corporate website, claiming they help teach money management skills.

Really? Raise your hand if you think getting your kid a Kardashian Kard says anything other than: "Here, go blow some cash on something you can't really afford."

The only lesson being taught here is how to overpay for nothing. So let's just call this scheme what it is: profiteering. There's nothing redeeming about the Kardashian Kard. Teen girls aren't being empowered. They aren't getting deals. Every signup is more money for Kim, Kourtney, and Khloe, and less for their fans.

At one time, I ranked a wallet-sucker called the Aspire Visa as "The Worst Credit Card Ever." Thankfully, that card is now defunct. I can only hope the Kardashian Kard suffers the same fate. Until it does, this fee-laden farce gets my vote as most worthy of taking Aspire's place atop this most putrid plastic mountain.

Now it's your turn to sound off. What do you think of the Kardashian Kard? Would you get one? Would you let your kids get one? Let your voice be heard in the comments box below.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy doesn't need to keep up with anyone.

Read/Post Comments (6) | Recommend This Article (24)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 22, 2010, at 3:31 PM, BMFPitt wrote:

    It's Stupid Tax just like the lottery, except at least some people win the lottery.

    I feel no remorse for anyone who gets this card.

  • Report this Comment On November 22, 2010, at 4:38 PM, CPACAPitalist wrote:

    There is such a need for basic financial education to the masses of teenagers out there who will be turned loose upon the world with pre-approved credit cards it is crazy. To me, I'd rather have my kids take a recquired class on financial principles than a foreign language or something like that. I'm all for education of every kind but there should be a order of priorities. (That being said, I plan on personally helping my son and daughter understand financial responsibility - but probably not for a few years since they are 3 years old and 2 months old respectively.)

  • Report this Comment On November 23, 2010, at 4:35 AM, raambo wrote:

    This is not only absurd, but immoral. Teenagers and especially college kids are short on cash as it is, and this is just another way for these glamorous idols to rip them off. The sad part is I know teens will not check the fine print and all the fees that are no doubt hidden within. I agree with the above poster, not to say that geometry or French isn't important, but in terms of having an impact on your life financial knowledge is extremely important. If every student graduated with even a basic knowledge in these matters, we would not see students graduating with six figure debts and a degree that will not pay the bills. I'm sure since that 2004 study was conducted that 1500 average debt figure has grown much larger. Along with that fundamental lack of knowledge in our younger generation, and a culture that thrives and encourages spending, I don't see this situation getting better anytime soon.

  • Report this Comment On November 25, 2010, at 12:45 AM, Clint35 wrote:

    It's so sad how little financial education people have. If middle school and high school students were taught more about managing their finances and making smart financial decisions cards like this would rarely even be put on the market. Companies would know they'd flop before they even tried it. And shame on the Kardashians for doing something like that, they're ripping off their own fans. But I'm sure they don't care about their fans as long as they make more money. And no I wouldn't get this card or let my kids get one. But I don't have any kids yet so I don't have to worry about that. Good article.

  • Report this Comment On November 28, 2010, at 9:29 AM, cbak wrote:

    Before blasting away at this card take a look at some of the other credit cards being offered in the market. Most retail cards carry interest rates in excess of 25% for any unpaid balance and similar fees for using a generic ATM. Cash advances interest payment starts at day one nowadays. Providers count on everyone, not just teens, thinking it only costs a few dollars (ie. "less than a cup of coffee per day") rather than looking at the percentage cost of those few dollars. Often really exhoritant. I always thought there were laws limiting excessive usery .

  • Report this Comment On November 29, 2010, at 1:10 PM, Doris411 wrote:

    No, cbak, the usury laws were repealed. Remember the double-digit prime interest rates of the 1970's?

    I have long believed that usury laws should be re-instated, or new ones passed. Preferably on the national level, since credit card companies already create sites in the states with the most favorable laws, and could certainly take advantage of any states without strong usury laws.

    With the current general interest rate climate, and public outrage against big banks, this would seem to be the ideal time to push anti-usury legislation; I don't see it happening, unfortunately.

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